Mid-sized businesses outperform FTSE and smaller businesses
The UK’s mid-sized businesses have outperformed the FTSE 350 and smaller businesses in the last year, according to new research from accountancy and business advisory firm, BDO.
Despite a challenging economic climate, mid-market businesses with revenues between £10m and £300m, AIM listed, and private equity owned businesses, what BDO calls the economic engine, grew turnover by 12% in the last year, to £1.5tn. This compares to overall turnover growth of 10% for FTSE 350 businesses and a reduction of more than a third (36%) in turnover for smaller businesses, defined as those with less than £10m in revenues.
Mid-sized businesses also demonstrated resilience in employment levels, reporting an increase in jobs of 1% in the last year. This brings the total number of employees to eight million, accounting for one in four UK jobs.
In comparison, FTSE 350 businesses saw the total number of employees fall slightly by 1%, to five million. Smaller businesses recorded a reduction of 15% with the number of employees dropping to two million.
Turnover growth in the mid-market varied between regions and sectors. In London, turnover in mid-sized business grew by 17% in the last year. In comparison, mid-sized businesses in the North East experienced smaller turnover growth of 9%.
These variations in regional growth are likely to be impacted somewhat by the performance of certain sectors. Businesses in the London-centric financial services sector grew turnover by 47%, whereas mid-sized manufacturers grew turnover by 7% in the same period.
Job growth also varied between regions and sectors, with job creation from mid-sized businesses highest in Yorkshire and the Humber, increasing 4% in the last year. Mid-sized businesses in the North West however, saw jobs decline by 1%.
Paul Eagland, Managing Partner of BDO commented:
“The businesses that make up the UK’s economic engine have remained incredibly resilient over the last few years, despite facing major hurdles including Brexit, the pandemic, the cost-of-living crisis, and now the threat of a recession.
“Some of the targeted announcements in the Chancellor’s Budget will have been welcomed by business leaders, but many believe the policies have not gone far enough to create real economic growth.
“Policymakers should not underestimate the value of the UK’s economic engine. Despite accounting for less than 1% of firms overall, they are ambitious and entrepreneurial, providing one in four jobs, and over £1tn in revenues. With the right support, their growth will be the driving force behind the UK’s economic recovery at a time when we need it the most.”
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